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Function documentationCalculation of Raw Net Demand

 

To determine which quantity the customer actually needs, the replenishment service calculates the raw net demand for every period. The raw net demand represents the unrounded net demand of the customer in a period prior to the planning, which the supplier must cover by using planned receipts. In the raw net demand, the system – contrary to the gross demand – considers the existing stocks and receipts (in other words, the current projected stock). The raw net demand is the basis for calculating the planned receipts.

Caution Caution

In case you defined the delivery date as the base date for replenishment planning for a supplier and a customer location product when demand data, planned receipts, replenishment orders and ASNs already existed for that supplier and customer location product, the relevant demand data is offset to the delivery date. However, the system cannot offset the replenishment orders and ASNs that have been already published when you changed the setting for the base date for replenishment planning to delivery date. The system considers these orders and ASNs for replenishment planning on their availability dates. Therefore, the replenishment monitor displays uncovered demand during the transition period for these suppliers and customer location products. This issue persists until the replenishment orders and ASNs that have been published before you changed this setting are closed.

End of the caution.

Features

Calculation of Raw Net Demand for (Baseline) Demands

The system calculates the raw net demand for every period in the planning period. To do this, it uses the replenishment method that you have configured for the customer location product. The raw net demand is the difference between the target stock of the period (the stock upon which the system is to fill up the projected stock) and the current projected stock of the period prior to the planning. The target stock depends on the replenishment method. You determine the replenishment method in the replenishment service profile. For more information, see Replenishment Method.

Calculation of Raw Net Demand for Promotions

If you use promotions in the Responsive Replenishment (RR) business scenario, the system conducts a separate planning for baseline demands and promotion denands. The system at first calculates the baseline raw net demand for a particular period, using the Net-Demand-Based Replenishment replenishment method. The system then calculates the raw net demand of the promotion for that period, as follows:

  • If the projected stock for the promotion in this period is positive, the raw net demand is 0.

  • If the projected stock for the promotion in this period is negative, the raw net demand equals the projected stock.

Functions That Reduce Raw Net Demand

The following special functions can reduce the raw net demand of a product in a period:

  • Consume Predecessor Product (Product Interchangeability)

    The replenishment service can consider whether a predecessor product exists for a product. If yes, the replenishment service creates a product substitution order. In doing so, the replenishment service redirects the demand of the product entirely or partially to the predecessor product, and reduces the raw net demand of the product accordingly. The replenishment service also saves the redirected quantity in the key figures Substitution Receipt and Substitution Demand. The key figure Substitution Receipt represents a receipt for the product (positive quantity). The key figure Substitution Demand represents a demand for the predecessor product (negative quantity).

  • Use Surplus Baseline Stock for Promotion

    In the location product master, you can make settings so that the replenishment service uses the surplus projected baseline stock of a period (projected stock minus safety stock) to cover the promotion demand of the same period. The replenishment service saves the used baseline quantity in the key figure Baseline Demand for Promotion. For baseline planning, this key figure represents a demand (negative quantity), for promotion planning it represents a receipt (positive quantity) that reduces the raw net demand of the promotion. You configure whether the replenishment service is allowed to use surplus projected baseline stock to cover the promotion stock, in the location product master on the WE/WA tab page.

  • Use Future Promotion Receipts

    When the replenishment service for a period calculates the promotion raw net demand, it also considers the future receipts for the promotion in the successor periods until the end of the promotion. If the total receipt quantity in the successor periods exceeds the total demand quantity in the successor periods, the replenishment service uses the difference quantity to reduce the raw net demand of the current period. In doing so, the replenishment service can avoid an overdelivery of the promotion. In the replenishment service profile, you can extend the horizon in which the replenishment service considers future receipts, to beyond the end of the promotion.